We're talking to many savvy investors who are already thinking about 2024, and how they can get into the best position to take advantage of opportunities.
As a result, I thought it would make sense for me to share a blog about a few things I think you should be doing and/or considering for the year ahead:
What many people often don’t realize is that how your mortgages are structured could be the difference between where you do or don’t get the
lending you need for your next move. This could include the repayment type (P&I versus IO), remaining loan term, if all your lending is
with one bank, and a myriad of other things which we can review for you, and best of all - the review is free! We recommend doing this as
soon as possible so you don’t continue down an incorrect path, if you’re on one, (re-fixing when you should be re-structuring, for example)
and also so you are set up for the next opportunity before it comes up - rather than trying to get everything together at the 11th hour and
potentially missing out.
The property market is already moving. Data suggests that the bottom of the property cycle is behind us, and prices are already going up. You don’t want to be left behind because you aren’t keeping up to date.
There are many changes that have happened in the banking space over the last few months, including changes to servicing criteria, interest only criteria with some banks (and extending this), and even some banks requiring significantly less documentation when it comes to loan applications - provided you meet the criteria.
If you’ve been told no in the past (early 2023) find out if there are alternative options for you now.
We are seeing many clients pick up property deals where they are making large equity gains by either buying well, or renovating & adding value - or a combination of both. One thing's for sure though - the ones sitting on the side aren’t the ones benefitting. It’s gotten a lot tougher to get lending from a bank if you are a property investor - whether it’s down to LVR’s, or servicing criteria, we are speaking to many investors who are keen to buy more but unfortunately banks are saying no.
Non-bank lenders over the last 12-24 months have made up a significant proportion of the loans we do here at KPM, and that’s because savvy investors are willing to pay a bit more in financing costs if the deal makes sense. For example, an extra 1-2% in financing costs on a $1m loan might be another $10k-$20k per annum, but if you’re getting $50k-$80k of equity as a result of the purchase then it may make sense to work with a non-bank rather than doing nothing on the sidelines.
Overall, the key to moving forward in any property market is taking action, and in 2024 it’ll be no different.
If you’re wanting to achieve your property goals next year, get in touch with us now.